Every week, Simply Money’s Nathan Bachrach, Ed Finke and Amy Wagner answer your financial questions. If you, a friend, or someone in your family has a money issue or problem, please feel free to send those questions to yourmoney@enquirer.com

Carl: What’s a ‘load’ mutual fund? My advisor has me in a few different ones, and I don’t know if this is a good thing or not. Should I ask him to invest me in something else?

Answer: When a mutual fund has a “load,” that means there’s a sales commission associated with that mutual fund. That sales commission usually goes to the broker or financial advisor who sold you the fund.

There are two main types of loads or sales commissions: front-end and deferred. A mutual fund with a front-end load means you pay a sales commission up front. It will be a percentage of how much you invested. For example, if you put $10,000 in a mutual fund that has a five percent load, your investment in the mutual fund is actually $9,500 and the advisor who sold you the load pocketed $500.

The other type of load is a deferred, also called a back-end load. This sales commission occurs when you sell the mutual fund. Often, if you hold the mutual fund for a certain number of years, that sales commission will decrease and it could go away. For example, if you hold on to a mutual fund with a deferred load for five years, there may be no contingent deferred sales charge when you sell it.

The details of loads will be in the mutual fund’s “prospectus,” a legal document that outlines the fees, risks, investment strategy and other fund details.

It’s possible the investment advice you’re getting is not completely independent since the broker or financial advisor is getting paid to sell you that mutual fund. However, if you really like a certain person who manages a fund or want to invest in a very specific investment niche that only that fund can fulfill, then maybe that loaded mutual fund is for you.

At Simply Money Advisors, we do not encourage the use of mutual funds with loads. The Simply Money Point is this: If load mutual funds are something your financial advisor has encouraged you to invest in, you may want to look into other investment options without a commission. You want to make sure all your investments are suitable to help you reach the financial goals detailed in your personal financial plan.

Jody in Cincinnati: I recently decided to rollover my old 401(k) into an IRA. I just assumed the old 401(k) money would automatically go into the new IRA, but I just received a huge check made out to me. What do I do now?

Answer: Ideally, when rolling over a 401(k) into an IRA, you want the money to go directly from one account to another account without you ever touching it. This usually comes in the form of a trustee-to-trustee transfer or direct transfer.

Since this check was made out to you directly you (an “indirect” transfer), the IRS requires your plan administrator to withhold 20 percent of the money. For example, if you’re rolling over an account with $50,000 in it, your check would only be for $40,000. This is basically like collateral, encouraging you to complete the rollover.

But understand this: when you’re depositing the money into your new IRA account, you need to deposit the full amount. This means you need to make-up for that “missing” 20 percent with money from another source. In our above example, that means you would need to deposit the $40,000 check plus $10,000 from money you have elsewhere. And you have 60 days to do this. Otherwise, the IRS will consider that 20 percent a distribution, and they’ll tax you on it (and penalize you if you’re younger than 59 ½). As long as you deposit the full amount into your new account within the 60-day time limit, you’ll get back that extra out-of-pocket money when you file your taxes.

If you miss the 60-day deadline completely and don’t deposit any of the money, the entire amount of your check will be considered taxable, and again, depending on your age, subject to a penalty.

The Simply Money Point is that, in your particular case, make sure you stay organized and have all of the appropriate documents during tax time (keep your eye out in your mail for tax form 1099-R). But generally speaking, whenever possible, opt for a trustee-to-trustee transfer or direct transfer – it will be much less complicated.

Responses are for informational purposes only and individuals should consider whether any general recommendation in these responses are suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing, including a tax advisor and/or attorney. Nathan Bachrach and Ed Finke and their team offer financial planning services through Simply Money Advisors, a SEC Registered Investment Advisor. Call (513) 469-7500 or email simplymoney@simplymoneyadvisors.com.